International Business Machines Corp. posted its lowest quarterly revenue since 2009, missing analysts estimates. The disppointing result put extra pressure on Virginia Rometty, the current Chief Executive Officer of the company, who has been recently trying to push IBM to progress, shifting the focus of the company to cloud computing and data analysis.
Despite the weaker-than-expected results, the Chief Executive and Chairwoman of International Business Machines Ms. Rometty explained that the company had remained focused on social, mobile and security data analytics and cloud computing during the quarter. After joining the IBMs team a few years ago, CEO Rometty has been trying to push the company to success by getting rid of lower margin units.
Ms. Rometty said in a statement, which was cited by the Wall Street Journal: “In the first quarter, we continued to take actions to transform parts of the business and to shift aggressively to our strategic growth areas including cloud, big-data analytics, social, mobile and security.” As reported by the Financial Times, International Business Machines Corp.s Chief Executive Officer also said: “As we move through 2014, we will begin to see the benefits from these actions. Over the long term, they will position us to drive growth and higher value for our clients.”
In 2013 the company acquired the cloud provider SoftLayer Technologies Inc. in a 2-billion-dollar deal. In addition, it spent more than 1 billion dollars for making a new group focused on its Watson technology.
The company made a statement, revealing that its revenue for the first quarter of 2014 decreased by 3.9% and reached 22.5 billion dollars. International Business Machines Corp. also said that its adjusted earnings fell to 2.54 dollars per share, which matches the analysts estimates. The operating margins increased by 90 basis points and reached 47.6%.
Despite the weak results, the company maintained its full-year 2014 forecast of 18 dollars per share in operating earnings.
International Business Machines Corp. was 0.31% down to settle at $196.40 per share yesterday, marking a one-year change of -7.36%. According to the information published on CNN Money, the 22 analysts offering 12-month price forecasts for International Business Machines Corp. have a median target of 190.00, with a high estimate of 225.00 and a low estimate of 160.00. The median estimate represents a -3.26% decrease from the last price of 196.40.
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